BOSTON, May 12 /PRNewswire/ -- Boston Properties, Inc. (NYSE: BXP)
announced today that it has signed a letter of intent with Prudential
Insurance Company of America (Prudential) and David Rockefeller and Associates
(Rockefeller) to acquire the six-building portfolio known as Embarcadero
Center in San Francisco, California.  Additionally, the Company has signed a
binding agreement with Prudential to acquire 100% of the commercial property
and a 50% controlling partnership interest in approved development rights
associated with the Prudential Center complex in Boston, Massachusetts.
    The commercial property in the Prudential Center acquisition, located in
the heart of Boston's Back Bay office and residential neighborhood, totals
2.21 million square feet.  It consists of 1.72 million net rentable square
feet in two office buildings, a retail complex of 489,000 net rentable square
feet and a parking garage with 2,550 spaces.  The approved development rights
allow approximately 1.75 million gross square feet of new construction.  The
Company anticipates closing on the Prudential Center by early summer 1998.
    The Embarcadero Center acquisition will consist of 3.76 million square
feet in six Class A buildings, two more than the four buildings originally
marketed by Prudential and Rockefeller.  The project includes 3.4 million net
rentable square feet of office space, 354,000 square feet of retail space and
2,090 parking spaces directly under the buildings.  The six properties,
situated on 8.4 acres of waterfront property in the heart of San Francisco's
Financial District, include Embarcadero 1, 2, 3 and 4, as well as the two
additional properties known as Embarcadero Center West Tower and the Old
Federal Reserve Building.  The property is the largest mixed-use business
complex in the western United States.
    Boston Properties Chairman Mortimer B. Zuckerman said, "Both the
Prudential Center and Embarcadero Center are irreplaceable premier office
complexes in two of the best and most restrictive office markets in the
country with significant barriers to entry.  Both projects will be flagship
properties for the Company.  Embarcadero Center is located in the heart of the
city's Financial District with sweeping views of San Francisco Bay, the Golden
Gate and Bay bridges and the San Francisco peninsula.  Prudential Center is
the largest mixed-use development in New England and is located in Boston's
upscale Back Bay neighborhood.  Both properties offer high ratios of parking
space to tenant space, which contributes significantly to revenue and income,
and both provide extensive retail space that is fully integrated with office
and public spaces.  We are pleased to be in a position to acquire both
properties at below replacement cost.  The office space in both Prudential
Center and Embarcadero Center is 99% leased to tenants which are among the
elite firms in their fields.  Over the next several years as leases renew, the
rents should provide dramatic increases in income."
    In Embarcadero Center, over the next four and a half years, office leases
involving approximately 1.5 million square feet will expire or reset to
market, representing in the aggregate 46% of the property.  These leases have
a weighted average rent that is estimated to be at least $15 below current
market rents, which are expected to increase over time.  A study by Rosen
Consulting Group estimates that downtown San Francisco Class A rents will
increase 22.6% in 1998 and 10.2% in 1999 as vacancy continues to fall and no
competitive supply enters the market.  According to Cushman & Wakefield, the
vacancy for San Francisco Central Business District Class A space was at 3.0%
at the end of the first quarter of 1998.  Based on the Company's assessment of
the cost of lease renewals and expectations regarding future rental levels,
the Company estimates that annualized unlevered funds from operations
generated by the Center will represent a 7.8% yield for the year ending
December 31, 1999.  The Company believes that the lease renewals over the next
five years will represent an opportunity to significantly grow future
earnings.
    The total purchase price for Embarcadero Center is $1.22 billion.  David
Rockefeller and Associates have agreed to receive as consideration for their
interest in Embarcadero Center $305.0 million of convertible preferred
OP Units in the Company's operating partnership subsidiary and will appoint
Richard E. Salomon, a longtime Rockefeller associate, to the Company's Board
of Directors.  In addition, Prudential may acquire $100.0 million of Boston
Properties stock.  The Company estimates that the acquisition cost allocable
to the office and retail space (after deducting parking space) is less than
$300 per square foot.
    Since 1990, Embarcadero Center has benefited from $85.0 million in capital
improvements made by Rockefeller and Prudential, a significant portion of
which refurbished the retail space.  The 354,000 square feet of retail space
and public space on three floors consist of 125 shops, restaurants and service
providers in an integrated structure convenient to the Center's estimated
15,000 workers and is a major shopping attraction for visitors and area
residents.  Enhancing nighttime and weekend traffic are a five-screen cinema,
which opened in 1995, and the SkyDeck observation area atop One Embarcadero
Center, which opened in 1996.  Among future neighboring amenities, the city's
new baseball stadium is scheduled to open in April 2000 at the south end of
the waterfront area.  Embarcadero Center's 2,090 underground parking spaces
are a rarity in San Francisco due to city restrictions on parking facilities
development, and offer a further marketing advantage to the property, as well
as being a significant revenue and income source.  Parking rates are rising
steadily and have contributed 10% to operating income annually.
    In Prudential Center over the next five years, leases involving
approximately 885,000 square feet, representing 40% of the entire property,
will expire, reset to market, or reset to a fraction of market.  These leases
have a weighted average rent estimated to be at least $20 below current
estimated market rents.  Based on the Company's assessment of the cost of
lease renewals and expectations regarding future rental levels, the Company
expects that annualized unlevered funds from operations generated by
Prudential Center will represent an 8.20% yield for the year ending
December 31, 1999.
    The total purchase price for Prudential Center is $519.0 million.
Prudential will receive in the transaction $95.0 million of OP Units and is
also expected to acquire $55.0 million of common stock of the Company.  After
adjusting for the value of the 2,550 parking spaces, the purchase price
allocable to the office and retail space is approximately $180 per square
foot.  The Company is also acquiring a 50% interest in the development rights
for $27.0 million and Prudential is retaining a 50% interest.  The development
rights will include 992,000 square feet of office space, 241,000 square feet
of retail space and 371,000 square feet of residential new space.
    Prudential Center is one of the premier addresses in Boston.  The
project's office and retail tenants include leading firms, retailers and
restaurants.  In 1993, Prudential invested $110.0 million to renovate the
retail portion of the project, which benefits from the project's
6,000 workers, guests of the neighborhood's 5,000 hotel rooms and residents
and visitors of the upscale Back Bay.  The project has benefited from a stable
list of high-quality tenants that has kept the office portion near full
occupancy for more than 30 years.  The 2,550-space parking garage, the largest
in Boston, also provides the project with a significant competitive advantage.
    David Rockefeller stated, "I have been proud and pleased to be associated
with Embarcadero Center for 30 years.  It is one of the outstanding real
estate developments in San Francisco and the State of California.  This
agreement with Boston Properties, which has an exemplary record in real estate
and is one of the nation's premier real estate companies, allows me to
continue to have an active interest and involvement in Embarcadero Center
while providing my estate with the liquidity and diversity I felt desirable to
achieve at this time.  I am also pleased that as a major equity owner with
representation on the Board of the Company, I will have the opportunity to
work with Mort Zuckerman and Ed Linde."
    John Strangfeld, Prudential Executive Vice President for all private
investments, said, "These transactions underscore the vitality of the San
Francisco and Boston real estate markets and the U.S. commercial real estate
industry overall.  For Prudential, they are major step in our effort to change
the way we invest in the asset class on behalf of our General Account."
    David Twardock, Senior Managing Director for Prudential's General Account
real estate investment portfolio, added, "Prudential Center and Embarcadero
Center have been outstanding investments for Prudential for more than 25
years.  In the case of Embarcadero Center, we couldn't have had a better
partner.  We are pleased to retain an indirect interest in these properties as
a significant Boston Properties shareholder."  Boston Properties' agreement
regarding Embarcadero Center marks the third transaction involving Prudential,
the first being the Prudential Center in Boston followed by an agreement in
principle to acquire the two remaining development sites in New York City's
Times Square, which would contain in the aggregate 2.0 million square feet.
Headquartered in Newark, New Jersey, Prudential is one of the nation's leading
financial institutions and has been one of the leading investors in commercial
real estate.
    The letter of intent on Embarcadero Center is nonbinding and no assurance
can be made that a final agreement will be reached or that the acquisition
will be consummated, nor can the definitive terms of any final agreement be
determined at this time.  Lehman Brothers Inc. served as financial advisor to
Prudential and Rockefeller in the sale of Embarcadero Center.
    Boston Properties expects to utilize the current on-site management team
of Embarcadero Center to ensure a seamless transition of the ownership of the
property.

    Boston Properties, Inc. is a fully integrated, self-administered and
self-managed real estate investment trust ("REIT") that develops, redevelops,
acquires, manages, operates and owns a diverse portfolio of office, industrial
and hotel properties predominantly located in the Greater Boston, Greater
Washington, D.C., Midtown Manhattan, Baltimore, Maryland, and Richmond,
Virginia markets.  The Company is one of the largest owners and developers of
office properties in the United States.

    To receive Boston Properties' latest news and corporate developments via
fax at no cost, please call 1-800-PRO-INFO.  Use company code BXP.

    This press release contains forward-looking statements within the meaning
of the Federal securities laws.  Forward-looking statements are inherently
subject to risks and uncertainties, many of which cannot be predicted with
accuracy.  Acquisitions that are pursued by Boston properties man not be
consummated for a variety of reasons, including a failure to reach agreement
with the selling party regarding the acquisition price or other terms of a
contribution or acquisition agreement.  Information contained in this release
regarding current and future market conditions is based on the Company's
assessment of the market and is subject to the uncertainties inherent in such
an assessment.  In particular, national and regional economic conditions and
the rate of new construction and rehabilitation in a market will affect
projected rents and the cost of lease renewals.

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